Correlation Between Bank of America and Henderson International
Can any of the company-specific risk be diversified away by investing in both Bank of America and Henderson International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of America and Henderson International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Henderson International Opportunities, you can compare the effects of market volatilities on Bank of America and Henderson International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank of America with a short position of Henderson International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Henderson International.
Diversification Opportunities for Bank of America and Henderson International
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Henderson is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Henderson International Opport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson International and Bank of America is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank of America are associated (or correlated) with Henderson International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson International has no effect on the direction of Bank of America i.e., Bank of America and Henderson International go up and down completely randomly.
Pair Corralation between Bank of America and Henderson International
If you would invest 3,938 in Bank of America on September 1, 2024 and sell it today you would earn a total of 813.00 from holding Bank of America or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Bank of America vs. Henderson International Opport
Performance |
| Timeline |
| Bank of America |
| Henderson International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Henderson International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Henderson International
The main advantage of trading using opposite Bank of America and Henderson International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Henderson International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Henderson International will offset losses from the drop in Henderson International's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Henderson International vs. Henderson European Focus | Henderson International vs. The Hartford Capital | Henderson International vs. Ivy Asset Strategy | Henderson International vs. Loomis Sayles Strategic |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance |